demand deposit
C2Formal, Technical, Financial
Definition
Meaning
A bank deposit that can be withdrawn by the depositor at any time without prior notice or penalty.
Any deposit held by a bank which the customer can access on demand, typically through the use of cheques, debit cards, or electronic transfers; the basis for chequing/current accounts.
Linguistics
Semantic Notes
This is a technical financial term, often used in contracts, banking regulations, and economics. It refers to the asset side of the bank's balance sheet (a liability for the bank). It is sometimes called 'sight deposit' in British contexts. It contrasts directly with 'time deposit' or 'savings deposit'.
Dialectal Variation
British vs American Usage
Differences
In the UK, 'current account' is the common consumer term for the account holding demand deposits, while 'sight deposit' is a near-synonym in banking. In the US, the consumer term is 'checking account' and 'demand deposit' is the formal/technical term. The concept of 'demand deposit' itself is identical.
Connotations
No significant connotative difference; purely technical/neutral in both varieties.
Frequency
The term 'demand deposit' is used more frequently in American financial journalism and regulatory language. In the UK, 'current account balances' or 'sight deposits' may be used in equivalent contexts.
Vocabulary
Collocations
Grammar
Valency Patterns
make a demand deposithold funds in a demand depositwithdraw from a demand depositthe demand deposit at [Bank Name]Vocabulary
Synonyms
Strong
Neutral
Weak
Vocabulary
Antonyms
Phrases
Idioms & Phrases
- “Money in the till (informal, related concept)”
- “Liquid cash”
Usage
Context Usage
Business
The company's primary demand deposit is held with Barclays for daily operations.
Academic
The textbook defines the monetary aggregate M1 as comprising currency in circulation plus demand deposits.
Everyday
My salary goes straight into my demand deposit account so I can pay bills.
Technical
The reserve requirement ratio is applied to the bank's net demand deposit liabilities.
Examples
By Part of Speech
verb
British English
- The business chooses to demand deposit its excess cash for liquidity.
American English
- Corporations often demand-deposit their operational funds.
adjective
British English
- The demand-deposit facility saw increased use.
American English
- We reviewed our demand-deposit accounts last quarter.
Examples
By CEFR Level
- I keep my money in a bank account I can use anytime.
- A current account is an example of a demand deposit account.
- Banks must keep a reserve against their customers' demand deposits.
- The central bank's policy directly influences the creation of new demand deposits through fractional-reserve banking.
Learning
Memory Aids
Mnemonic
Think: You DEMAND your money, and you get it immediately—it's on deposit but available on DEMAND.
Conceptual Metaphor
MONEY IS A LIQUID (demand deposits are the most liquid form of bank-held money).
Watch out
Common Pitfalls
Translation Traps (for Russian speakers)
- Avoid literal translation as 'требование депозита'. The correct term is 'депозит до востребования' or 'текущий счёт'.
- Do not confuse with 'срочный вклад' (time deposit), which is the opposite.
Common Mistakes
- Using 'demand deposit' to refer to a savings account (incorrect).
- Saying 'demanding deposit' (grammatical error).
- Confusing it with a deposit that is in high demand (semantic error).
Practice
Quiz
Which of the following is NOT a characteristic of a demand deposit?
FAQ
Frequently Asked Questions
For all practical purposes, yes. The money in a checking/current account is a demand deposit. 'Demand deposit' is the technical financial term, while 'checking/current account' is the consumer-facing name.
Traditionally, they earned little or no interest. However, in modern banking, some interest-bearing current/checking accounts exist, blurring the line with savings products, but the key feature remains instant access.
They form the bulk of the money supply used for daily transactions (M1). Their stability and the public's confidence in them are crucial for the payment system and banking sector stability.
A demand deposit offers unlimited, immediate withdrawals (e.g., via debit card or cheque). A savings deposit may limit the number of withdrawals per month, require notice, or not offer cheque-writing facilities, often in exchange for higher interest.